UK lender Lloyds sells Irish commercial loans to group of investors
30 July 2015
UK bank Lloyds sold a portfolio of impaired Irish commercial loans to a group of investors including Bank of Ireland for about £827 million. The sale, which was expected to close by the end of the year, would cut the banking group's exposure to Irish commercial assets to less than £30 million.
The consortium also counts Ennis Property Finance, an entity affiliated to Goldman Sachs and Feniton Property Finance, an entity affiliated to CarVal, a private equity group among its members.
Bank of Ireland would acquire a portfolio of around € 200 million performing commercial loans, comprising over 650 customers in the SME and CRE sectors.
According to Mark Cunningham, director of Bank of Ireland Business Banking, the acquisitions demonstrated the bank's ongoing focus on further growing and developing its strong position in serving the business banking sector in Ireland.
The value of the assets in the portfolio was £2.6 billion, of which £2.3 billion were impaired. In the year to 31 December 2014 the portfolio generated pre-tax losses of around €130 million.
Lloyds said in a statement that it would use the proceeds for general corporate purposes and the transaction was not expected to have a material impact on the group but would be capital accretive.
The loss from the assets was £ 130 million in 2014.
According to Lloyds the transaction was not expected to have a material impact on it, but would add about 7 basis points to its capital ratios.
This comes as the latest Irish loan sale by Lloyds, which had been steadily reducing its Irish exposure since the crash.
Goldman Sachs and CarVal meanwhile had bought several Irish assets in recent years.